Safaricom no longer outsources offshore, to launch innovation hub

Five years ago, there was a heated debate online; both twitter and FB. Kenya developers, led by the late Idd Salim complained that Safaricom was busy paying lip service on its support of local tech ecosystem, yet it was busy outsourcing its work to India.

There was a lot of acrimony and pointing of fingers but at the end of the day, Safaricom admitted that it was going to be engaging more with the local tech community. Of course, one of the jobs that went to one of the noise makers had to be recalled and finished by “Indians” after the guy took the deposit and failed to meet the timelines or deliver the final products. That guy has since been mute about Safaricom giving work; locally or otherwise. These are harsh lessons learnt on both sides.

Last week, Safaricom launched its sustainability report; it is one way for them to tell us how awesome they are. The report contained very detailed impact that it has in the country but if you are a dev, the question would be, does Safaricom still outsource to offshore companies? No.

“We have not outsourced any of our work off-shore. As per our recently released Sustainability Report, we worked with 1,094 suppliers and spent a total of just under KES 76.8 billion on products and services between 1st April 2015 and 31st March 2016.

We continue to favour local suppliers where feasible, and are satisfied with the weighting towards Kenyan companies achieved during the year, with 84% of our providers being local,” said Bob Collymore, Safaricom CEO.

Some of the companies taking a big chunk of the money are probably those we have never heard of; they are quietly doing their work and increasing their pie. For the tech companies who would like to deepen this relationship or increase a share of the pie, what should they do? Collymore answers:

“Our current “customer first” strategy is driven by finding out what our customers require and creating solutions to meet these needs. We continue to explore partnerships around this strategy as well as around our three key innovation pillars (Health, Education and Agriculture). We are open to working with players in the technology sector to develop and take to market solutions that are in line with these pillars”

Launching innovation hub

Friday last week, Safaricom announced that it will launch its innovation hub, which usually is a cheaper way to access R&D. Safaricom has been supporting local innovation hubs, both financially and through bandwidth. I am yet to understand why it has taken this route, given the outcomes of other innovation hubs, including that announced by Equity Bank in 2011. Read the first two stories.

“We’ve also announced a new Innovation Hub, which will operate independently and will provide a space for developers to focus on innovation and research around mobile-based technology solutions, while at the same time driving our innovation agenda,” he added.

Apart from the innovation hub, Safaricom has the venture capital Spark fund. You will remember it with the controversial funding of a company that jetted in a month before……gave power to a few black people aka painting it to political correctness, then won. It gave the fund the right to say its all Kenyan. I am sure it has now improved.

The fund has invested in companies like Sendy, Eneza, Lynk, and mSurvey. Safaricom partnership with Little cab, which is meant to take on Uber, is probably its most famous investment.

1 COMMENT

An interesting perspective and well balanced to the point that it seems like an internal Safaricom memo.

It will make Sam Gichuru feel vindicated when he said that only 1 in every 100 developments given to local developers is completed to the clients satisfaction, this includes inability to implement web page templates,

You forgot a product called mLedger, which is wholly developed locally, that Safaricom licensed/purchased, which to me would be sign that Safaricom is not making enough noise.

I believe we should not forget to look at the results from the enabling environment that Safaricom has provided to the developer ecosystem. Even with its clumsy interface, Bob’s words not mine, it has enabled organisations like PesaPal and JamboPay to thrive.

Let us not only look at the direct beneficiaries but also the offshoots which like the branches and roots of a tree are much larger than the trunk.